Could the Phoenix Coyotes Return to Winnipeg?

Kevin van Steendelaar@@LeTirEtLeButAnalyst IMay 17, 2009

2 Oct 1996:  Right-winger Teemu Selanne of the Anaheim Mighty Ducks moves around the net during a game against the Winnipeg Jets played at Arrowhead Pond in Anaheim, California.  The Mighty Ducks won the game, 6-2. Mandatory Credit: Glenn Cratty  /Allsp

The lead attorney for the Phoenix Coyotes, Earl Scudder, said NHL commissioner Gary Bettman told him that he would would rather have the team move back to Winnipeg, rather than relocate to Southern Ontario.

From a report in the Toronto Star, Scudder related the comment in a declaration filed in U.S. Bankruptcy Court, where the battle over control of the franchise between the NHL and owner Jerry Moyes is set for a hearing this Tuesday.

NHL deputy commissioner Bill Daly called the bankruptcy filing, “nothing more than a scheme to misuse this court and sidestep the NHL’s transfer of ownership and relocation process, as well as the league’s fundamental right to choose its own members and to decide where they should be located.”

The Coyotes bankruptcy proposal would sell the team to Canadian billionaire Jim Balsillie for $212.5 million on the condition the franchise be moved to Hamilton, Ontario.

This is Balsiliie's third attempt to gain control of a struggling NHL franchise. His bids to acquire the Pittsburgh Penguins and Nashville Predators were rejected.

Balsillie has apparently secured a lease agreement with the city of Hamilton to use Copps Coliseum and has received corporate backing from Labatt Breweries and Home Hardware.

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The NHL, which wants to keep the team Arizona, claims that since it had assumed control of the franchise, the bankruptcy filing was unauthorized and should be thrown out.

In any event, the move of the team needs approval by the league's owners, something Bettman feels they will reject.

Scudder and the rest of the Coyotes' legal eagles have filed documents, saying blocking the move to Canada violates U.S. and Canadian antitrust law.

The league says its authority already has been upheld by courts in both countries.

According to Scudder’s account, the only way a team could end up in southern Ontario, Bettman said, was through expansion.

“He (Bettman) stated the matter of relocation was an NHL matter that was beyond the authority of any franchise owner,” Scudder said.

Daly stated in an email that a move to Winnipeg would be a last-resort option.

"In the event there turned out to be no options in Phoenix – and only in that event – we thought it was worth exploring what might be available in Winnipeg," Daly said in reaction to the latest documents.

It will be up to judge Redfield Baum to sift through the pile of documents submitted to the court this week.

The most crucial documents will be the agreements signed by Moyes when he bought the team in 2006 and, most significantly, when the NHL took over funding of the franchise last November.

The NHL contends Moyes and Balsillie carried on “secret negotiations” while the league was pursuing a plan to sell the team to a group headed by Jerry Reinsdorf, owner of baseball’s Chicago White Sox and the NBA’s Chicago Bulls.

Daly said he flew to Phoenix on May 5 to present a letter-of-intent to Moyes from Reinsdorf.

Before that could happen, the Coyotes filed for bankruptcy.

The amount of Reinsdorf’s offer is not known, but it would include modifications of the team’s lease agreement with the city of Glendale, which is currently for 25 years.

Scudder said Balsillie was “the only potential purchaser or investor that had suggested an offer in the range that would return money to creditors and even a portion of Mr. Moyes’ more than $300 million investment in the team.”

According to the documents, the Coyotes lost nearly $74 million in 2007 and 2008. Moyes has said that even with the Balsillie agreement, he would lose about $200 million.